For investors looking to make a difference with their dollars, impact investing is a great way to align your portfolios with your values. While impact investing is multi-faceted, this article specifically focuses on the opportunities to support gender diversity with your investments. Studies have shown that companies with more gender diverse leadership have greater innovation, increased productivity, higher employee satisfaction, and higher employee retention (source: Impax Asset Management). All these positive outcomes should contribute to a stronger company with better performance than its peers. Therefore, it makes sense to support companies that encourage female leadership. Here are few ways to do that:
1. If buying stock in individual companies, there are certain characteristics to look for that will show the company’s support of women.
These include a high percentage of women in senior management, a high percentage of women on the company’s board of directors, and family friendly policies like paid parental and sick leave, breastfeeding support, flexible work arrangements, and access to affordable quality childcare amongst others.
2. To support a number of different companies at once, invest in a mutual fund or Exchange Traded Fund (ETF) that uses positive screening to find companies that excel in gender diversity.
One example of this type of fund is the PAX Ellevate Global Women’s Leadership fund (PXWEX). The fund’s manager focuses on these key characteristics:
- Hiring, promotion, and retention of women
- Gender pay equality
- Proactive gender goals and targets and/or signatory to the Women’s Empowerment Principles
- Transparency about gender diversity data
The fund finds companies all over the world that meet these requirements and engages with company management teams to makes suggestions on how they can improve.
Outside of the investment portfolio, make charitable donations to organizations that are working towards the advancement of women in the workforce and closing the gender pay gap.
Two examples are Gender at Work and the National Partnership for Women and Families. These organizations help companies gain the capacity to make sustainable progress on gender equality, women’s empowerment, and policy change.
If all of this seems daunting, enlist the help of a Financial Advisor with expertise in ESG (Environmental, Social, and Governance) Investing to guide you through the process of using your money to support female leadership. Interested in learning more? Bartlett hosted a webinar “Connecting Values + Investments,” where we were joined by industry experts to unpack opportunities for individuals and organizations to incorporate an impact investing approach into your personal wealth management approach. You can view a recording of that webinar here.